Page last updated at 22:50 GMT, Monday, 20 April 2009 23:50 UK

Homeless struggle in Atlantic City

BBC correspondent Matthew Price continues his journey across the US to assess whether there are any signs of economic recovery. Today he reports from Atlantic City, New Jersey, where life appears to be getting harder by the week.


Bill Southrey shows Matthew Price around the Atlantic City shelter

It is wet, windy and cold when I arrive in Atlantic City.

So dreary in fact that the tall downtown casinos on which this city's economy is built remain hidden by the drizzle until my car is almost right up alongside them.

The rain drips off the noses of the fake Roman statues at Caesar's Palace casino complex.

Atlantic City is suffering, and not just because of the weather.

BBC correspondent Matthew Price is travelling across the US, reporting from a new city every day, to assess the state of the economy as President Obama approaches 100 days in office. See the Beyond Wall Street route here.

Cristina Sanford knows that only too well. She is 21 years old, and already has three children.

Last September she lost her job as a cleaner. She spent several hundred dollars on training to become a casino card-dealer, but when her training had finished, the recession was in full swing, and the casinos were cutting back.

She gets $424 (£292) a month in cash from social security and $584 a month in food stamps. Her rent was $900 a month. So she is now homeless, and relies on the Atlantic City Rescue Mission for a place to stay.

Does she see any sign that things are getting better? "No I don't. I think it's getting worse. Everybody's getting laid off."

Falling donations

Homelessness is rising across the United States. According to the US Conference of Mayors 25 of the largest cities here reported an average 12% increase in homelessness in 2008 compared with 2007.

Atlantic City
Atlantic City's glossy exterior gives little hint of an economy in trouble.

In 16 cities there were more homeless families. A lack of affordable housing, poverty and unemployment all contributed to the problem.

On top of that, those who try to help the homeless are suffering.

Bill Southrey runs the Atlantic City Mission where Cristina Sanford is staying. He says the organization is already about $46,000 behind in donations this year.

Their stock market investments have also lost value. "We're not at crisis at this point, but it could all vanish in an instant," says Mr Southrey.

Suffering spreads

It is not however just the vulnerable who are in trouble.

"My wife and I live pay-check to pay-check," Stephen Irish says. He is one of a growing number of middle class Americans who are experiencing economic difficulties.

He and his wife have no children, but they have five jobs. Their combined income is $60,000 a year.

"We're struggling," says Mr Irish.

Mr Irish teaches public relations, management, and marketing in New Jersey. He believes one of the problems has been America's desire for short-term riches.

The students would "take a six week real estate course, rather than a long term education", he says.

"They wanted 'make-a-lot-of-money' careers."

Discretionary spending

One of the big problems in Atlantic City is that it relies on one industry - gambling.

A player puts a coin in an Atlantic City slot machines
Atlantic City relies heavily on the gambling industry.

Betting on betting is fine in the good times, but when things turn sour the system declines.

The area is trying to diversify, to make Atlantic City a destination for tourists interested not just in gambling. Now is not a good time to try and change however.

"The impact of the economy has been more daunting here," says Linda Kassekert, the chair of the New Jersey Casino Control Commission.

"People are careful as to where they spend their discretionary dollars. Probably discretionary spending will be the last thing to come back."

Even if the economy is seeing some glimmers of hope, as some suggest, Atlantic City won't see them for some time. "There is little we can do but weather the storm," Ms Kassekert adds.

Economic locomotives

Some fear New Jersey's storm will not clear soon.

The state was once a manufacturing powerhouse. It lost out to other less unionised areas of the country and the world, but re-invented itself in the 1980s and became a national player in the business services and leisure sector.

Dr James Hughes, an economist at New Jersey's Rutgers University, is not sure how it can re-invent itself again.

"The question is what are the new economic locomotives? It's the big question of our era," he says.

As far as Dr Hughes is concerned there are no signs that an economic transformation is under way.

"I don't see any transformative investment being made. I don't see any investment to create transformative industries. Nor anything to encourage private sector investment."

New Jersey's problem, and that of Atlantic City, is how to tap into the new wave of growth industries that will spring up out of this recession.

There will be winners and losers in the grand geographical and social upheaval the US is currently going through.

The hope for Atlantic City is that it will be on the winning side. If it is not, many here fear the long-term consequences for people like Cristina Sanford and her three children.

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